Eni and Petronas are considering the establishment of a joint venture (JV) holding company to oversee selected upstream assets in Indonesia and Malaysia.

The companies announced an exclusive memorandum of understanding (MOU) to progress detailed discussions on the JV formation.

Eni and Petronas have communicated their intentions to the respective governments of Indonesia and Malaysia.

The finalisation of any transaction will be contingent upon obtaining necessary governmental, regulatory and partner approvals.

The collaboration is expected to generate substantial synergies, positioning the venture as a key liquefied natural gas player in the region.

It aims to achieve a sustainable production level of 500,000 barrels of oil equivalent per day in the medium term.

The JV will combine approximately 3 billion barrels of oil equivalent (bboe) of reserves with an additional 10bboe of potential exploration upside.

The focus will be on investing in new gas development projects, aligning with the companies' commitment to energy transition and addressing the growing regional domestic gas demand.

A comprehensive business plan will be developed to capture future opportunities in exploration, development and potential portfolio growth.

The assets will maintain their existing operational structure, emphasising health, safety and environment, project delivery and efficiency.

Both companies will continue to uphold their sustainability commitments.

The JV will leverage the competencies and financial capabilities of Eni and Petronas and is expected to secure external financing independently.

Eni and Petronas aim to ensure stable production for Malaysian assets while supporting timely new developments in Indonesia.

Petronas, through its Malaysia Petroleum Management division, has also signed two strategic MOUs to advance technology and operational efficiency in Malaysia’s exploration and production sector.

The first MOU with Schlumberger WTA Malaysia aims to enhance technical capabilities through AI, machine learning and genAI technologies.

Petronas has also announced an expansion plan in Indonesia, aiming to establish an operational hub in East Java and explore investment opportunities in the country's eastern regions.

This move aligns with the Indonesian Government's commitment to enhancing energy development to counteract the decline in output experienced by the former OPEC member.